St. Albert city council unanimously voted last week to send the provincial government a letter of support for a $50 million or more funding request being made by ARROW Utilities, formerly known as the Alberta Capital Region Wastewater Commission.
ARROW Utilities is a non-profit company responsible for managing the wastewater (sewage) infrastructure in 13 municipalities throughout the region. The company is responsible for setting wastewater transmission rates, which are monthly charges included in property owner's utility bills. The rates are based on every cubic metre of water used by residents and businesses.
As the Gazette reported in December, residents of St. Albert and the surrounding municipalities could be facing a decade of annual rate increases because ARROW Utilities is experiencing a capital funding crunch for a much-needed upgrade and expansion of a sewage treatment plant north east of Edmonton.
Coun. Ken MacKay, the company's current board chair, said the expansion and upgrade of the plant is needed to keep pace with overall growth in the region, as well as growth in the Industrial Heartland, which covers parts of five municipalities: Fort Saskatchewan, Strathcona County, Sturgeon County, Lamont County, and the northeast corner of Edmonton.
MacKay told his fellow councillors on Jan. 23 the company is facing a $166 million bill to upgrade and expand the treatment plant, which in itself is more than the company's provincially dictated debt limit of about $137 million, and 50 per cent higher than more than the estimate the company was working with just a few months ago.
To address the issue, the company is seeking approval for a debt limit increase from the provincial government, while also asking the province to kick in $50 million or more to pay for the project.
“With the cost escalation and the fact that, really, the cost will (otherwise) be borne on the backs of ratepayers, we believe that the province should be willing to assist in relation to coming up with some grant money,” MacKay said. “If we can get $50 million guaranteed — it doesn't have to come all in one lump sum it just needs to be guaranteed — we don't have to increase our rates any more than a little bit for next year and then we can hold it steady.”
For 2024, ARROW Utilities increased its residential and non-residential wastewater rate by 19.4 per cent. That rate increase was a substantial contributing factor to the 8.5 per cent overall utility rate increase approved under St. Albert's 2024 municipal budget.
The CEO of ARROW Utilities, Kate Polkovsky, published an opinion column in the Edmonton Journal last April asking the province to support this plant upgrade, arguing that not only would provincial help reduce the affordability burden being faced by Albertans, it would also ensure Alberta will “win” the “global hydrogen race.”
“This is important, as a result of 40-year high inflation, Albertans have less money in their pockets,” Polkovsky wrote. “We must do everything we can, therefore, to guard against placing an undue burden on residents to access a vital service that protects the health and safety of our communities.”
“We’re ready to support Alberta’s growing hydrogen industry, but we can’t do it on our own.”
MacKay said if provincial funding can't be secured, the company's other hope for fending off continual rate increases is their ability to sell treated wastewater — which will only be possible after the plant is upgraded — back to industrial customers like Air Products Canada, which can use the treated water in its production of hydrogen.
“We're not only going to give them that wastewater which is treated a little bit better, we're actually going to receive wastewater from them, so they'll pay for the treated water, but they'll also pay us because they'll have to discharge their wastewater back to the plant,” MacKay said, although he added the two companies are still negotiating how much Air Products will pay for the treated water.
“We don't know what that exact revenue is... we're in the process of working with a consultant that will give us a rate model, but it will be significant.”
MacKay said asking companies like Air Products or Dow Chemicals for capital contributions to help pay for the plant upgrade could be an option, but at the same time, ARROW already charges the companies “significant amounts of money” for their use of the treatment plant, and ARROW might face pushback from the companies.
“I don't want to constrict new hydrogen plants or new growth in the region because it benefits the entire region; we see a direct benefit from assessment (property tax) dollars,” he said.
An unnamed spokesperson for Transportation and Economic Corridors said in an email that ARROW's funding request is under review.
“Alberta’s government is aware of the funding request and has met with ARROW Utilities and affected municipalities,” the email reads. “Their proposal is currently under review.”
St. Albert Mayor Cathy Heron said on Jan. 23 the goal of St. Albert city council's letter of support for ARROW's request is to push the provincial government to provide the funding.
“The provincial support, we're hoping, is going to come due to their interest in hydrogen and the Dow plant in Fort Saskatchewan, both of which require these plant upgrades,” Heron said.
“We need the provincial government to step up on this.”
On Jan. 23, Beaumont city council also unanimously voted to send the provincial government a letter of support.
